Korean Margin Debt Nears 34 Trillion Won as Forced Selling Accelerates
As South Korean stocks continue to plunge, fears of forced liquidation are becoming a reality for retail investors who borrowed money to buy shares. Many investors increased their margin borrowing in anticipation of a market rebound, only to face an unexpected downturn. Falling stock prices have tri
South Korean margin debt has reached a critical level of 34 trillion won, prompting accelerated forced selling among retail investors who borrowed money to purchase shares. As stock prices continue to plummet, collateral values have dropped below required levels, triggering a vicious cycle of forced liquidations. The Korea Financial Investment Association reported that outstanding margin loans surged to 33.71 trillion won, surpassing the 34 trillion won mark for the first time in three months.
Forced selling has already occurred, with the value of forced liquidations against unsettled brokerage receivables reaching 89.34 billion won the previous day. Analysts warn that extreme market volatility is likely to persist, with the KOSPI potentially falling as low as the 5,100 level.
Brief written by urgent.news from BusinessKorea's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
